2025 Shocking Real Estate Lies This NJ Man Told IRS

NJ Man Admits to Tax Evasion in a federal case that has shaken the local real estate world and exposed deeper issues in tax compliance. A New Jersey resident has pleaded guilty to tax evasion tied to an elaborate real estate scheme, according to a recent announcement from the U.S. Department of Justice.

The case highlights not just a single crime but a broader trend of financial misconduct involving property investments, shell companies, and fraudulent deductions. Investigators claim the man concealed hundreds of thousands of dollars in income while orchestrating a network of real estate deals to avoid federal taxes.

The Defendant and the Case Overview

According to federal court filings, 47-year-old Richard DeLuca of Monmouth County, NJ, knowingly underreported income over multiple tax years, specifically from 2018 to 2022. DeLuca owned and operated several real estate companies under various names, many of which he used to facilitate illegal deductions and move funds without triggering red flags.

The IRS discovered DeLuca’s actions during a routine audit that uncovered major inconsistencies in reported property sales, mortgage deductions, and shell entity transfers.

Assistant U.S. Attorney Sheila Monroe said, “This case demonstrates the serious consequences for individuals who think they can outsmart the tax system. We will continue to pursue those who commit fraud at any level.”

How the Scheme Worked

The method DeLuca used to commit tax evasion was both simple and effective. He created several LLCs (Limited Liability Companies) which he used to buy and flip residential and commercial properties. While these activities can be legal, he reported only partial income from these transactions and often diverted profits into untraceable accounts.

Some key details from the IRS criminal investigation include:

• Fake Deductions: DeLuca claimed property renovation expenses that were never incurred.
• Unreported Sales: He omitted multiple property transactions from his filings.
• Misuse of Shell Companies: Funds were routed through dummy LLCs to avoid detection.
• Cash Payments: Some deals were completed in cash and never documented on tax returns.

This complex web of deception allowed DeLuca to avoid paying over $380,000 in federal income taxes over five years.

IRS and DOJ Step In

The Internal Revenue Service’s Criminal Investigation Division led the probe alongside the Department of Justice. Forensic accountants uncovered large disparities between bank records and tax filings.

IRS Criminal Investigator Paul Reyes stated, “DeLuca used sophisticated strategies to avoid taxation, but in the end, financial trails always lead somewhere. When people cheat the system, they cheat honest taxpayers.”

The government is also working to recover back taxes, interest, and penalties, potentially exceeding half a million dollars. Additional civil fines could also apply under federal tax law.

Legal Consequences and Sentencing Outlook

DeLuca has officially entered a guilty plea in U.S. District Court. He now faces a maximum penalty of five years in federal prison, along with restitution payments and supervised release.

Sentencing is set for September 12, 2025. Federal prosecutors have hinted that they may request the higher end of sentencing guidelines due to the scope and premeditated nature of the crime.

The plea deal does not shield DeLuca from future charges if new evidence surfaces regarding other unreported properties or associates involved in the scheme.

Community Impact and Financial Ethics

This case sheds light on a growing concern in the real estate industry—tax manipulation through shell entities and non-transparent transactions. As property markets boom in many U.S. states, federal agencies are ramping up oversight.

Experts say that tax evasion cases like DeLuca’s can disrupt public trust and lead to inflated real estate prices. Ethical investors also suffer as illegal shortcuts provide unfair advantages to bad actors.

Financial advisor Sharon Keller commented, “This isn’t just a victimless crime. When people cheat the tax system, it impacts public services, housing stability, and market trust.”

5 Key Lessons from the Case

1. Transparency Matters: Even successful real estate investors can face prison if they don’t report income honestly.
2. Fake Deductions Are Easily Traced: Tax audits often expose false expense claims.
3. Shell Companies Raise Red Flags: While legal, they are scrutinized when used to hide income.
4. Cash Doesn’t Make It Invisible: The IRS has advanced methods for tracing unreported cash earnings.
5. Guilty Pleas Don’t Guarantee Leniency: Courts may still impose severe penalties.

Public Reactions and Next Steps

The local community has responded with concern. Many had previously viewed DeLuca as a savvy businessman with an eye for opportunity.

Now, property buyers and investors in the area are urged to conduct due diligence when working with real estate firms. Regulators also recommend hiring certified public accountants for any investment-related tax filings to avoid accidental non-compliance.

Authorities are encouraging the public to report suspected tax fraud through the IRS Whistleblower Program, which offers monetary rewards for verified tips.

Conclusion

The story of how this NJ man admits to tax evasion is a stark reminder that no one is beyond the reach of federal law. DeLuca’s case sends a powerful message: real estate success should not come at the cost of legal integrity.

Tax evasion remains a federal offense with serious consequences, and the government continues to pursue those who break the rules—whether through real estate deals or other financial strategies.

Also Read – NJ Man Admits to Tax Evasion in Federal Case Involving Real Estate Scheme